Which of the below statement is incorrect with regards to a policy against which a loan has been taken from the insurance company?

A. The policy will have to be assigned in favour of the insurance company

B. The nomination of such policy will get cancelled due to assignment of the policy in favour of the insurance company

C. The nominee’s right will be affected to the extent of the insurer’s interest in the policy

D. The policy loan is usually limited to a percentage of the policy’s surrender value

Answer: Option B

Solution(By Examveda Team)

The nomination of such policy will get cancelled due to assignment of the policy in favour of the insurance company is incorrect with regards to a policy against which a loan has been taken from the insurance company.